S&P Assigns 'AAA' Ratings to Toyota Yen Issues

8 July 1998

S&P Assigns 'AAA' Ratings to Toyota Yen Issues

    TOKYO--S&P's CreditWire 7/8/98--Standard & Poor's today assigned its triple-'A' ratings to Toyota Motor Corp.'s Y50 billion 1.4% domestic straight bonds due July 30, 2003 and to the company's Y100 billion 2.03% domestic straight bonds due July 30, 2008.
    The ratings are based on Toyota's ability to maintain an exceptionally strong financial profile amid an increasingly challenging industry environment. One of the world's leading automakers, Toyota benefits from its dominant share of the Japanese automobile market, a solid presence in the global automotive industry, superior product engineering, very high productivity, and low debt usage.
    Toyota is expected to maintain a strong financial profile despite the current downturn in Japan's automobile market, although profitability over the near term will remain below the peak level of fiscal 1997 (ended March 1998). Toyota's ability to weather market adversities is supported by the company's strong sales network, its rigorous cost-reduction efforts, and its improving sales performance in major overseas markets. The company also benefits from the yen's current weakness.
    Toyota's debt usage is very low. The ratio of total debt to capital, after adjusting for debt held by finance subsidiaries, is below 10%. Moreover, Toyota has excellent financial flexibility, in the form of more than Y1.7 trillion (about US$12 billion) in cash and short-term marketable securities as of March 1998.
    OUTLOOK: STABLE
    Toyota is expected to maintain its exceptional financial profile under the difficult operating environment, backed by its outstanding market position, improved cost structure, and very conservative financial profile, Standard & Poor's said.---CreditWire